Capital Market Products

Aggregation Platform for Future Flow Securitization

Future flow securitization has proven itself to be a useful method for borrowers situated in countries with low credit ratings to issue securities that are highly rated in the international capital markets. Borrowers, no matter how financially strong they might be, are normally constrained by the credit rating of the countries where they reside. This can be a financial problem for strong companies situated in countries with weak credit ratings. Future flow securitization evolved in this environment to provide a solution for such companies. During the last decade, the technique has proven its reliability by weathering many financial crises. Smetrix's financial design takes this financing technique to the next level by enabling many borrowers, not just one, to pool their future flow assets to take advantage of economies of scale of larger issue sizes and achieve even stronger credit ratings through diversification. Smetrix's financial technology also permits multiple issuers to pool future flow assets with zero impact on their existing operations.

Strip Securitization of Government Securities

Historically domestic banks have been major investors of government securities (GS) holding approximately a third of all outstanding issues.  Banks have traditionally invested in GS by booking GS investments in the corporate entity which has been licensed by the authorities with a banking license.  Securitization law allows banks to organize special purpose entities whereby GS can be purchased through the issuance of asset backed securities, instead of securities issued by the bank itself.  The GS is then stripped, meaning divided, into its underlying components of interest and principal so that each strip component can be directly assigned to the participant who needs to receive it.  The result is lower intermediation costs and therefore enhanced profitability for the bank.  Smetrix provides a customized securitization accounting system to keep track of the underlying transaction for banks and investors in the securitization of the GS.

 

Electronic Infrastructure

Expanded Small Investor Program (E-SIP)

Retailing of Government Securities is a means for governments to directly access end-investors in order to lower its overall cost of borrowing. SMetrix, Inc. developed a fully scripless end-to-end solution that allows the Philippine government to sell Treasury Bills directly to investors in denominations as low as PhP 5,000.00 (roughly US$ 100). Investors buy their securities over the internet and the system automatically debits the cash account of the buyer and then credits the securities account in the Bureau of Treasury’s Registry system. Maturities are likewise handled in a fully scripless environment where the cash account of the investor is automatically credited. The system was the subject of a World Bank study and the study compared it to the US Treasury Department’s TreasuryDirect system.

Marketplace for Small and Medium Enterprise

Receivables Purchases (M4SME-RP)

Delivering working capital and supply chain financing in emerging markets is a challenge given that credit information is unreliable. M4SME-RP allows for the dematerialization of accepted trade invoices that are digitally authenticated by both transacting counterparties in a binding electronic contract using digital signatures. These authenticated documents can be financed through an electronic over the counter market that allows for both primary trading via daily auctions and secondary trading. The marketplace works in a completely scripless backroom environment that allows for straight-through-processing from the trading platform to the securities custodians and the settlement banks.

Digital Check Infrastructure

A fully electronic means for providing check writing, clearing and posting check payments using Digital Signatures and the Internet as a transactions medium. Unlike Check21 in the U.S., the SMetrix, Inc. system delivers a fully scripless environment from the check writing to clearing and posting.